Quote from: smooth on July 11, 2014, 05:57:43 AM

Quote from: Peter R on July 11, 2014, 03:14:25 AM

bitcoin market cap = $8.033 billion
total crypto market cap = $8.571 billion

Bitcoin represents 94% of the crypto market cap. So, if you think bitcoin will appreciate at a faster rate on average than alt-coins in aggregate, then you should allocate less than 6% of your crypto portfolio to the alts. If you think alt-coins will eat into bitcoin's % market share, then you should allocate more than 6%. If you think you can pick a winning coin, then of the % you have decided to allocate to alts, you should invest more heavily in those you think will be "winners."

By this logic a "neutral" allocation would be 99.9% in fiat (denominated assets). By choosing bitcoin at much more than 0.1% of your assets you are already actively managing. A lot.

Correct. So if an individual doesn't have at least 0.1% of their investment portfolio in crypto, then they are underweight. Which means most people are underweight. And this is why I think the Winklevoss ETF will have a large impact. Why not risk at least 0.1% if the pay off is potentially 100X +?

By my own definition, probably everyone here is vastly overweight in crypto vs fiat. I agree. I think bitcoin will appreciate faster than fiat-denominated investments (in aggregate), so it makes sense to be overweight in bitcoin. It's a bet I am willing to take, and one I think is in my favour based on the asymmetry of my knowledge. That being said, I am much more confident in crypto in general than any particular alt coin.